Investments  

Investment scam emerges involving parking spaces

Investment scam emerges involving parking spaces

A trend in consumers being targeted for investment opportunities in parking spaces at locations close to major airports has been identified by the National Fraud Intelligence Bureau.

The NFIB said that the method used by those selling the parking spaces is very similar to that used by businesses selling unregulated investments including diamonds, wine and carbon credits.

Common features include members of the public receiving unsolicited calls from forceful sales people offering an opportunity to invest in parking spaces or promoting it as a “sound pension investment”.

Additionally, there are verbal and written promises of a guaranteed and questionable high rate of return.

A buy-back scheme is also offered, but there is absolutely no guarantee of an onward sale.

The NFIB said that members of the public should be aware that some consumers may receive an attractive initial dividend payout but there is no guarantee of long term future dividends and investment may result in long term financial loss.

In some cases it is suspected that the initial dividends are paid out from the investments of subsequent investors, which is similar to a Ponzi scheme.

Alonsgide this, the NFIB said that post investment, the consumer may find it difficult to contact the investment company to discuss their investment or reap any financial returns.

Additionally, the cold callers may be acting as estate agents and seeking to sell parking spaces owned by another. If the company offering the investment is not a registered estate agent then caution is advised.

The NFIB added it is working in close partnership with the Financial Conduct Authority, HMRC, National Trading Standards, City of London Police and the National Crime Agency to clamp down on investment scams.

Tom McPhail, head of retirement policy at Hargreaves Lansdown: “Like other scams such as property development, overseas investments and storage pods, the sales pitch can sound seductive.

“Investors should never trust cold-callers and critically, they should only deal with regulated businesses. FCA regulation gives investors the security of dealing with a well-managed business, as well as a compensation scheme if something goes wrong.”

“We would like to see a more robust distinction made between FCA supervised businesses selling regulated investments, which very rarely result in poor outcomes for investors, and these unregulated salesmen who seem to be able to operate with impunity.

“Policymakers should look at developing a kitemark or logo for regulated businesses and investments to help potential victims to identify a possible scam. This would send a clear message that if you buy an investment without this logo, it could be a scam and would be at your own risk.”

ruth.gillbe@ft.com